KIEV (Reuters) - Ukraine's interim leaders on Wednesday pushed a plan to allow the regions a greater say over their affairs, but the exclusion of separatists from round table talks cast doubt over whether the move could defuse the crisis.
The talks brought together politicians and civil groups in an effort to quell a pro-Russian rebellion in the industrialized Donbass region of eastern Ukraine, which has triggered fears of a break-up of the former Soviet republic.
They came at a tense moment for Kiev. On Tuesday, seven soldiers were killed in an ambush near the city of Kramatorsk, the deadliest attack on security forces since they were sent to tackle the uprising in the east in April.
Voters in the eastern regions of Donetsk and Luhansk backed self-rule in two referendums held on Sunday despite protestations from Kiev, which sees Russia's hand behind the rebellion and denounced the votes as illegal.
After the voting, rebel leaders in Donetsk and Luhansk called for their regions to become part of Russia although this call has not been taken up by Moscow.
When the round table talks opened in the parliament building in Kiev, the country's main leaders sharply attacked Russia, with acting president Oleksander Turchinov accusing Moscow of launching "systematic action to destabilize eastern and southern regions of Ukraine" to produce an "explosive situation".
And, in comments angled at the separatist rebels who were excluded from the talks, Prime Minister Arseny Yatseniuk said: "We will conduct a dialogue with all those who do not shoot and do not kill citizens."
But Yatseniuk went on to press a decentralization plan ceding greater powers to the regions which the Kiev authorities hope will address disaffection in eastern Ukraine and help undercut the influence of rebels seeking to break altogether with Kiev and join the Russian Federation. Such a scenario is seen by Kiev as pointing a way to resolving the crisis.
"Using mechanisms for changing the constitution, we should be able to de-centralize power and confer additional powers on regional authorities ... create a real balance (between central and regional authorities)," he said.
Under the plan regions could hold back a portion of taxes for direct use in improving infrastructure and conditions for local businesses.
But the plan's architects are keen that they do not allow discussion of 'federalization' - an idea pushed by Russia and the separatists - which they fear would lead to too-great autonomy and weaken the grip of the central government.
Ukraine's wealthiest businessman, Rinat Akhmetov, whose vast mining and steel-producing empire stretches across the Donbass, threw his weight behind the decentralization strategy, describing it as the "only right way" of ending the crisis.
"I strongly believe that Donbass can be happy only in a united Kiev," he said in a statement issued by his holding company, System Capital Management.
Wednesday's talks brought together ministers, political party leaders, candidates for the presidential election on May 25, business representatives and local government officials.
Kiev's exclusion of the rebels - whom it describes as "terrorists" - from the talks has drawn criticism from abroad. Moscow has said there should be direct talks between separatists and Kiev.
Among those to express hope in the talks was German Chancellor Angela Merkel, who said the more representatives were present, the better. The unrest in Ukraine and Russia's annexation of Crimea have contributed to the worst East-West crisis since the 1991 collapse of the Soviet Union.
In the rebel redoubt of Slaviansk on Wednesday, Vyacheslav Ponomaryov, the self-appointed mayor, said he had heard nothing of the round table.
"The Kiev junta organized that? ... Our first condition for talks with the Kiev junta is the immediate pullout of all the troops of the Ukrainian army from the territories of the Donetsk, Kharkov and Lugansk regions... As long as they are on our territory there will be no talks," he declared.
There have been no public negotiations between separatists and the government since the crisis began in early April.
"There is no reason to expect any concrete decision (from the talks)," independent analyst Volodymyr Fesenko said.
"If there are not people in authority from the east at these talks this round-table will lose all sense."
Additional reporting by Aleksandar Vasovic in Kramatorsk; and Pavel Polityuk and Natalya Zinets; Writing By Richard Balmforth; Editing by Giles Elgood